- Pravin Jadhav's home loan was rejected as he was seen as a high-risk borrower by the bank
- Indian banks often assess entrepreneurs' loans based on repayment history and income consistency
- Salaried borrowers have simpler risk profiles due to fixed income and predictable cash flows
Building a billion-dollar company may earn admiration. But it doesn't always guarantee a home loan.
Pravin Jadhav, founder of fintech startup Raise, recently revealed that his application for a home loan was rejected by a bank because he was classified as a "high-risk" borrower. His post has sparked a wider debate about how Indian banks assess entrepreneurs seeking retail loans.
Raise (parent company: Dhan) is backed by investors, and is valued at around $1.2 billion. It operates in the fintech space. Yet Jadhav says that wasn't enough to convince a bank that he was a safe borrower.
Sharing his experience on X, Jadhav wrote that despite running a successful company, the bank declined his application after categorising him as "high risk". The post quickly went viral, with many founders and professionals sharing similar stories of struggling to access credit despite having strong businesses.
The incident has once again raised questions about whether India's lending system adequately recognises entrepreneurial income, which often looks very different from a salaried employee's monthly pay cheque.
Why Banks May Reject Entrepreneurs
According to Rati Shetty, Chief Product Officer at BankBazaar, the issue is less about entrepreneurship and more about how lenders measure risk.
"Ongoing public discussions around how entrepreneurship impacts credit access highlight a common frustration and take me right back to why BankBazaar was founded," Shetty said.
"The reality is that lenders do not underwrite ambition; they underwrite predictability. Often, 'high risk' simply means 'hard to document' because lending is built entirely on repayment predictability."
She explained that both public and private sector banks primarily assess repayment history, existing debt obligations and consistency in income tax filings before approving loans.
While documentation requirements can be extensive, Shetty said India's credit ecosystem continues to support entrepreneurs.
"By presenting structured financial histories, independent borrowers can bridge this information gap, showing their creditworthiness and securing the right loan products to successfully support and fully fund their own personal and professional business growth aspirations," she added.
Why Salaried Borrowers Often Have An Advantage
For banks, salaried applicants usually present a simpler risk profile. They receive fixed monthly income, submit standard salary slips and have predictable cash flows.
Entrepreneurs, on the other hand, may have fluctuating incomes. Their earnings are often linked to business performance, dividends or equity holdings rather than fixed salaries. Even founders of highly valued startups may not draw large monthly salaries.
As a result, banks may ask for additional documents or apply stricter underwriting standards before approving loans.
Debate Beyond One Founder
Jadhav's experience has resonated with many startup founders who argue that traditional lending models are yet to fully adapt to India's growing entrepreneurial ecosystem.
At the same time, banking experts point out that loan approvals are based on documented repayment capacity rather than company valuations or public reputation.
